Trailer Shipments Plunge 11.8%

By Frederick Kiel, Staff Reporter

This story appears in the July 9 print edition of Transport Topics.
Shipments of new trailers to dealers and fleets fell 11.8% during the first five months of 2007, due in large part to the weaker economy, and will fall further this year, according to trailer manufacturers and analysts.
A.C.T. Research forecasts that total trailer shipments for 2007 will be down 15% from the 2006 total of 281,000, a company official told Transport Topics.
Both Jamie Scarcelli, director of marketing for Wabash National Corp., the nation’s largest trailer producer, and Chris Hammond, vice president of dealer sales for Great Dane Trailers, told TT that the A.C.T. forecast seemed accurate.
Class 8 tractor sales have fallen 33% from January through May this year, after record sales in 2006 pushed in part by truckers seeking to avoid potentially higher prices for 2007 engines; but trailer makers said this “pre-buy” had no effect on trailer sales.
“No one tracks retail sales of trailers so that this is the most accurate number we have of new trailers being moved into use,” Kenny Vieth, a partner in A.C.T. Research, told TT.  A.C.T. tracks shipments of dry and refrigerated vans, flatbeds and tankers. “Overall, A.C.T. believes the market will probably drop 15% in shipments for the entire year,” Vieth said.
This year, 95,974 tractors and 2,561 chassis were shipped from January through May, compared with 107,805 trailers and 7,040 chassis during the same period in 2006, Chris Brady, president of Commercial Motor Vehicle Consulting, told TT, citing A.C.T. Research.
“Depending on the exact product, our sales are down 10% to 20% so far from last year,” Hammond of Great Dane said. “Flatbeds have been hit hard by the construction slowdown, refrigerated trailers have been selling well, and dry vans are somewhere in the middle.”
Vieth said that weakness in the automotive and housing sectors, both heavy users of trucking, meant truckers did not have to expand their trailer fleets.
Parts for domestic products such as car seats — springs, nuts and bolts, frames, padding and covering — are moved to assembly plants in trucks, from which point they again travel by truck to an auto plant. The final product goes by truck to car dealers, Vieth said.
“Most imported goods, on the other hand, are usually sent by ship container to a port like Long Beach, then carried by train to a central location such as Chicago,” Vieth said. “From there, they’d make at the most two truck trips, 100 to 500 miles to a central warehouse, then much shorter distances to retail locations.”
 “Fleets that buy trailers act generally in a reactive rather than a proactive manner,” trucking analyst Brady said. “That means they buy trailers in reaction to what they’ve seen in the past six months, rather than what they think the market will be like in the future, and that’s why trailer sales are falling.”
Scarcelli of Wabash National said the company turned out 60,000 units last year.
Traditional Wabash customers said they planned to buy nearly as many new trailers in 2007 as in the previous year. “However, actual order placement rates are slower, as our customers’ business continues to follow the economy,” Scarcelli said.
Great Dane’s Hammond said trailer prices have risen rapidly over the past three years because of increased raw material costs, “and that’s put a lot of pressure on manufacturers, although prices have leveled off now.”
Great Dane expects a recovery in 2008.
“The indications from economists say that things will improve next year, and we hope they’re right,” Hammond said. “If GDP [gross domestic product] goes up, our business will go up."
Hammond said the slowdown has caused some Great Dane layoffs, but, “When orders have picked up, we’ve rehired people.”